2018 elec­tions: The fu­ture of health­care could be pur­ple

Modern Healthcare - - News - By Su­san­nah Luthi

THE DEMOCRATS’ PRE­DICTED blue wave looks poised to hit the Repub­li­cans’ red sea­wall, which means a big swath of the coun­try could crash pur­ple this midterm elec­tion cy­cle. For the health­care in­dus­try, where stakes are higher at the state level over the next two years, that could mean the states will carry out the kind of bi­par­ti­san work that stymies Wash­ing­ton.

“Keep in mind how Wash­ing­ton un­der the Democrats and Repub­li­cans has been in­creas­ingly un­able to get things done in a whole lot of ar­eas,” Char­lie Cook, ed­i­tor of Cook Po­lit­i­cal Re­port, told the Med­ic­aid Health Plans of Amer­ica con­fer­ence in Wash­ing­ton last week. “That has left a power vac­uum that has de­volved power out to state gov­ern­ments.”

As con­gres­sional Repub­li­cans and Democrats re­main grid­locked over changes to the Af­ford­able Care Act, the Trump ad­min­is­tra­tion is giv­ing states more lee­way to re­shape their in­di­vid­ual mar­kets. The CMS is also en­cour­ag­ing state-level over­hauls of Med­ic­aid with an eye to­ward shrink­ing costs.

This comes as Demo­cratic gu­ber­na­to­rial can­di­dates in red and pur­ple states run on Med­ic­aid ex­pan­sion. These op­pos­ing fac­tors set the stage for sig­nif­i­cant pol­icy changes that could min­gle Repub­li­can and Demo­cratic ideas.

Cur­rently the gov­er­nor and leg­is­la­ture in 26 states are Repub­li­can, with 13 states of those rated at var­i­ous de­grees of vul­ner­a­bil­ity. The same is true in eight states for Democrats, with five also con­sid­ered vul­ner­a­ble. But now more than 6,000 state leg­isla­tive seats are up for grabs. Nearly a third of the races for the 36 open gov­er­nor­ships are toss-ups—in­clud­ing Florida, Iowa and Wis­con­sin.

Here’s a look at how

Nov. 6 could change things:


Top of mind for the hos­pi­tal in­dus­try and in­sur­ers, Med­ic­aid ex­pan­sion is on the bal­lot in four states. Idaho, Ne­braska and Utah could ex­pand for the first time, and Mon­tana could ex­tend its pro­gram that is due to ex­pire.

Brian Whit­lock, CEO of the Idaho Hos­pi­tal As­so­ci­a­tion, called the bal­lot propo­si­tion a “top pri­or­ity,” as he em­pha­sized the fi­nan­cial im­pact of the state’s sig­nif­i­cant cov­er­age gap: 62,000 peo­ple who don’t qual­ify ei­ther for Med­ic­aid or for sub­si­dies on the ex­changes.

But gu­ber­na­to­rial races could also spur an­other slew of ex­pan­sions across widely vari­ant re­gions.

Demo­cratic can­di­dates An­drew Gil­lum in Florida, Stacey Abrams in Ge­or­gia and Tony Evers in Wis­con­sin are cam­paign­ing on Med­ic­aid ex­pan­sion in states where GOP-con­trolled ex­ec­u­tive and leg­isla­tive branches have so far strongly op­posed it. All three are polling in a dead heat with their op­po­nents.

Ex­pan­sion in just two of those states could mean a surge for man­aged-care in­sur­ers. “If the gov­er­nors flip in both Florida and Ge­or­gia, Med­ic­aid stands to add about 1 mil­lion lives—662,000 in Florida and 388,000 in Ge­or­gia— through ex­pan­sion,” said Alex Shekhdar, head of fed­eral af­fairs and state pol­icy for Med­ic­aid Health Plans of Amer­ica.

Nei­ther Florida nor Ge­or­gia has ap­plied for a work re­quire­ment waiver to the CMS, but Shekhdar be­lieves both could end up go­ing the Virginia route of a “com­pro­mise ex­pan­sion” where eli­gi­bil­ity could be paired with a man­date to work, vol­un­teer or en­roll in school. Demo­crat Drew Ed­mond­son is run­ning on ex­pan­sion in Ok­la­homa’s open gov­er­nor’s race, al­though pub­lic sup­port has not ap­peared strong enough to drive a voter bal­lot cam­paign there. This race is also a toss-up.

Maine vot­ers ap­proved ex­pan­sion but this year’s gov­er­nor race is still sig­nif­i­cant be­cause of dy­nam­ics that have so far blocked the roll­out. Term-lim­ited Repub­li­can Gov. Paul LePage lost an ap­peal to a law­suit over his re­fusal to im­ple­ment the ex­pan­sion as he ar­gued that the Leg­is­la­ture needs to first come up with a way to pay for the state’s share.

In the toss-up race to suc­ceed him, Demo­cratic At­tor­ney Gen­eral Janet Mills sup­ports ex­pan­sion and backed the law­suit against LePage. The GOP con­tender, busi­ness­man Shawn Moody, echoes LePage’s po­si­tion. As re­ported by the Portland Press-Her­ald, Moody has said ex­pan­sion is the law and he would im­ple­ment it, but with the caveat of “sus­tain­able and re­spon­si­ble fund­ing from

the Leg­is­la­ture.” Moody also sup­ports LePage’s ap­pli­ca­tion for a 1115 waiver to add work or vol­un­teer re­quire­ments for some in the pro­gram.

In Iowa, Repub­li­can Gov. Kim Reynolds is fight­ing claims that she’s moved too quickly to push Med­ic­aid man­aged care. The state’s rapid tran­si­tion to pri­vate in­sur­ers roiled providers and pa­tients as health plans lost hun­dreds of mil­lions of dol­lars. The state last year asked the CMS for $225 mil­lion in risk cor­ri­dor pay­ments to mit­i­gate the losses.

In­di­vid­ual mar­ket

States are also the bat­tle­ground for com­pet­ing vi­sions of the ACA. But where in­di­vid­ual states land may look more nu­anced.

Maura Cal­syn, man­ag­ing di­rec­tor of health pol­icy for the lib­eral Cen­ter for Amer­i­can Progress, is track­ing mea­sures that com­bat what ACA sup­port­ers deem “sab­o­tage” by the Trump ad­min­is­tra­tion: state-by-state restora­tion of the in­di­vid­ual man­date (as the Dis­trict of Columbia, New Jersey and Ver­mont have done), rein­sur­ance and state curbs on short-term plans. “Other pieces are the cuts to nav­i­ga­tors and out­reach pro­grams, and the short­ened open-en­roll­ment pe­ri­ods,” she said.

On the con­ser­va­tive side, a lot of hopes hinge on the ad­min­is­tra­tion’s 1332 state in­no­va­tion waivers as a driver for cre­ativ­ity. “To make the mar­kets work, you have to pur­sue dif­fer­ent strate­gies,” said Doug Badger of the con­ser­va­tive Her­itage Foun­da­tion. “Why not give states max­i­mum flex­i­bil­ity to try dif­fer­ent things?”

Con­gres­sional shift?

Democrats could eas­ily as­sume the man­tle of power in the House. (It’s much more un­likely in the Se­nate.)

That means over­sight. Key Democrats are clear they will pum­mel the Trump ad­min­is­tra­tion with sub­poe­nas to scru­ti­nize ev­ery­thing from Med­ic­aid work re­quire­ments, cuts to mar­ket­ing fund­ing for the ACA’s open en­roll­ment and nav­i­ga­tor pro­grams, and HHS’ role in the mi­grant chil­dren’s de­ten­tion cri­sis.

A Demo­cratic ma­jor­ity could also mean a seis­mic shift in the re­cent GOP House-driven mo­men­tum to re­form the 340B drug dis­count pro­gram, which has pit­ted hos­pi­tals against drug com­pa­nies in one of the most bit­ter lobby- ing wars on Capi­tol Hill. Democrats are largely on the side of hos­pi­tals as Repub­li­cans have pushed for stronger re­port­ing mea­sures and lim­its to how many pa­tients qual­ify for sig­nif­i­cant pre­scrip­tion drug dis­counts col­lected by the providers.

House Democrats are also sig­nal­ing will­ing­ness to work with the White House on low­er­ing drug costs, which is mak­ing man­u­fac­tur­ers ner­vous.

How­ever, as an­a­lysts from Height Cap­i­tal Mar­kets note, the Se­nate’s 60-vote thresh­old could block sig­nif­i­cant leg­isla­tive mea­sures.

For in­dus­try lob­by­ists who want to find a ve­hi­cle for their bills, next year’s ex­pi­ra­tion of dis­pro­por­tion­ate-share hos­pi­tal pay­ment cut de­lays as well as fund­ing for the U.S. ter­ri­to­ries likely mean that a health­care pack­age will be on the agenda for 2019. ●

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